International Gold Futures Plummet on Fed Rate Hike Announcement
(London, February 22, 2023) – International gold futures plunged on Wednesday following the Federal Reserve’s announcement of a 25-basis-point interest rate hike. The precious metal fell sharply after the Fed signaled its intention to continue raising rates in the near future.
As of 11:00 GMT, gold futures for April delivery were down 1.5% to $1,842.60 per ounce. The decline extended the metal’s losses over the past month, during which it has shed nearly 5% of its value.
The Fed’s monetary policy decision was widely anticipated by investors, but the strength of the central bank’s hawkish stance caught many by surprise. In its accompanying statement, the Fed said that it expects “ongoing increases in the target range will be appropriate” to bring inflation back to its 2% target.
“The Fed’s comments have sent a clear message that they are far from finished with their tightening cycle,” said analyst David Jones of Capital Economics. “This is weighing heavily on gold, which has traditionally been seen as a hedge against inflation.”
In addition to the Fed’s rate hike, the dollar strengthened against other major currencies on Wednesday, further pressuring gold prices. A stronger dollar makes gold more expensive for buyers holding other currencies.
“The combination of higher interest rates and a stronger dollar is creating a perfect storm for gold,” said analyst James Moore of Citigroup. “We expect further declines in the coming weeks.”
The decline in gold prices is a setback for investors who had been turning to the precious metal as a safe haven amid concerns about global growth and geopolitical tensions. However, analysts believe that the long-term outlook for gold remains positive, particularly if inflation remains elevated.
“Gold will likely remain under pressure in the near term, but we still believe there is value in holding the metal as a long-term investment,” said Jones. “Once the Fed’s tightening cycle ends, gold could see a significant recovery.”
原创文章，作者：Kevin，如若转载，请注明出处：https://fangeou.com/1929.html
